In case you weren't aware, Apple dipped into the billions of dollars it has on hand and gave a billion of it to Intel in exchange for the majority of Intel's smartphone modem business. The quick and dirty details of the deal give Apple over 2,000 new employees and most of Intel's modem intellectual property; Apple basically owns Intel's former LTE modem business and any work it has done for 5G modem tech. Intel, of course, gets $1 billion dollars. Both sides walk away happy.
Don't assume that this means the next iPhone is going to use an in-house modem design, though. After a lengthy trial over Qualcomm's alleged abuse of FRAND patents and Apple's use of tech without paying for it, Qualcomm was forced to adjust pricing, Apple was forced to pay back royalties, and both parties inked a $4.5 billion deal that allows Apple to use Qualcomm's modem IP for at least six years. The next iPhone will have a Qualcomm modem, and so will the one after that.
Ancillary fallout from that deal was Intel exiting the smartphone modem business. That brings us to today, where Apple picked up the pieces of Intel's foray into the smartphone business because it wasn't worth spending any more money there. Apple was Intel's only major customer for modem tech, and with Apple and Qualcomm working together the best course of action was to shutter the division. In short, Intel had become yet another victim of Qualcomm's questionable business practices.
What's not as clear as the recent history is what the future will hold now that Apple has everything it needs to build its own in-house phone modems. The likely scenario is Apple continues to use Qualcomm IP until it becomes economically feasible to stop. Qualcomm still has a tight grip on the smartphone business because its products are good enough to use as leverage to ensure it. Every company wants to use Qualcomm's tech inside its phone, and Qualcomm can influence the direction networks operators take because of it. Everyone wants their phone to work well and carriers want you to be happy enough to stick around. Qualcomm can make both happen right now, and Apple's new modem business can't, no matter how much money is sunk into it.
That will eventually change. All favoritism and silliness aside, Apple is a master when it comes to making an existing idea or technology better. That's not to say the company can't innovate, but it has an excellent track record of being the best if not the first when it comes to consumer tech. The company was able to license technology from ARM and build a small and power-efficient SoC that leads the industry when it comes to raw performance in a few short years, and given a few more it will be able to incorporate its own modem tech in a way that makes sense — including economic sense — into the iPhone. I think when the six-year agreement with Qualcomm ends, Apple will be ready for it.
Back to today, and there's little chance we'll see an Apple modem inside a phone. But Apple makes products that aren't phones, like the MacBook Air and iPad Pro. These devices have large batteries, room for a much better heat-management system, and would be able to support an off-die modem with very little performance impact. Apple could continue to license whatever it needs to use the existing A-series chip's RF solutions for Wi-Fi and Bluetooth while building out an all-new LTE modem. And that could potentially be game-changing.
There are a lot of people who depend on a mobile device like an iPad, ultrabook, or Chromebook rather than do "everything" on a phone. Were Apple to build an all-new LTE MacBook Air or introduce a new generation of LTE iPads (or both) it could light a fire under OEMs that build lightweight devices like Chromebooks or Windows two-in-ones.
That's something that Microsoft isn't able to do, Google seemingly has no interest in, and would boost what feels like a stalled market when compared to the smartphone business. And as we see all three tech-giants working on a one size fits all software solution where the lines between mobile and desktop are blurred, it sounds like something we just might need, too.
The tech lover in me wants to see Apple shake things up with its own smartphone modem in 2020 because it will force every other company to step up and try to do something similar. That's almost assuredly not going to happen, but seeing Apple use its new IP in convergent devices while it prepares would be an excellent consolation prize.
"Apple cares more about being best, not first. That's not going to change."
Yet, many give Apple credit for being first or even inventing something Android or Blackberry had, years ago.
That's bec they improve on it and make it better which becomes more appealing. Plus the fact Apple is such a big company and everyone tries to be like them (Google) they just follow /copy them and that's how the trends like the notch starts. As I said many times in the past the gesture navigation that Apple debute on the X that replaced its physical home button existed on BlackBerry and bef that Palm. No one bothered then to implement that until Apple did it. Same happened with Apple Pay and CarPlay and etc.
Does this mean Apple will be required to license out some of this tech as standards essential, or whatever the term is, if other companies want to use it?
As far as I'm aware, they'd only have to do that if they held the patent for something necessarily that there isn't an alternative to.
It would be nice if google did this to help out its smartwatch platform
Morning from what i can see. Nobody used Intel modems, Apple won't sell modems to anyone else and no one is going to start trying to produce their own modems just because Apple can.
Nice article! I enjoy your work.
At first I thought this would be good for competition, but I have to admit that Fuzzy's perspective is the more likely outcome. Any tech resulting from this is likely to live in Apple's products alone. Jerry, you don't own any current iPhones, do you? "leads the industry when it comes to raw performance" is not something that exists outside of marketing and benchmarks. I've owned pretty much every iPhone since gen 2, and we currently own the iPhone 8 Plus and the XS Max. The U11 outperforms the 8 Plus and gives the XS a run for the money. The HTC U12 Plus is faster than any iPhone ever made. The perspective changes when you use them size by side.
Apple controls the industry. 5G will go mainstream when they say so.
That may be true in some aspects, but this time they are getting left behind.
They are at the stage where other devices look better, feel better, sound better, and perform better.
Being years behind on 5G is not going to help.
I do not think they are getting left behind. That is your opinion though. If that was the case why does so much of the industry follow them. The look better feel better and sound better and perform better is once agin what you think but many others will not. I have held other phones but my XS feels very nice and will built. In terms of being years behind in 5G is an absurd statement considering it has been out for a whole 6 months and coverage is at best beta.
I agree that 5G coverage is beta, and a poor one at the moment. Not jumping on the cart before it starts moving is technically a good decision by Apple, but it will not do them any favors with public perception. By years, I was referencing the 5G version of the S10 being out now in 2019, and Apple's first 5G phone being in 2021. Now about the other items; look and feel are indeed subjective as you say. Back when the HTC U11 came out, I purchased it, and the iPhone 7 Plus, on the same day. When I got my hands on the U11, I forgot about the iPhone 7 for two weeks, and ended up giving it to one of the kids. That's my opinion, but when I was at public events and had the phone out, it got a surreal amount of attention from others. I'm a long term Apple user, and I'd never gotten that with any of my iPhones, or our 8 Plus and XS Max that we currently own. But, it might just be that everyone is familiar with iPhones, and does not pay them a lot of attention for that reason. "Feel" is even more subjective, and our XS Max just feels kind of blocky. That's not a bad thing, and the coating on the frame does help with grip, so I can appreciate that. "Feel" has nothing to do with why I the U12 Plus as my daily driver, but it is very refreshing to hold... almost like a piece of polished emerald. It will never sway you and it's no reason to buy a phone anyway, but if you ever do come across a U12+ in the wild, hold it in your hand and turn it over a few times. I think you'll like it ;) Performance though, is not subjective. When you have two phones side by side doing the same thing, and one of them can't keep up, there's no question. That's what happened with the XS Max and the U12 Plus... The U12 walked away or edged out the iPhone in everything except PUBG. Audio CAN be subjective, but I'm a professional sound engineer, and have a pretty good idea of what music should sound like since I'm hearing it exactly like it was originally intended. The closest you can get to standing the the studio control room, is HTC's USonic headphones, and they are simply mind blowing. They have ruined me, and I can't even listen to music on an iPhone and enjoy it anymore because I know what I'm missing.
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